What Is NEO?

Dubbed as the "Chinese Ethereum", the NEO cryptocurrency is one of the fastest growing blockchain projects at the moment.

It's introduced as an open-source, decentralized project that allows developers to build DApps using smart contracts.

Formerly known as AntShares, NEO rebranded in 2017 to its current name, an exercise that triggered its popularity across the globe. We're definitely long-time fans of the project but we've never given it a full run-down.

The information provided here is for informational purposes only and should not be seen as investing advice. Our opinions on this site are only that, if you are considering an investment into cryptocurrency or anything we speak about on this site, please advise a trusted financial professional first, before doing so.

NEO's Vision

This project is attempting to build an infrastructure for smart economies.

Its vision is to make ownership of assets more transparent, verifiable and connected.

Essentially, the coin isn't just a cryptocurrency but a platform that will digitize ownership of real-world assets.

How Does GAS Work?

Just like in share ownership where investors get dividends, NEO investors get passive income in form of GAS tokens.

Eight GAS tokens are generated with the construction of every block of the NEO blockchain.

After every two million blocks, the rate of GAS production is reduced by one token.

This essentially means that by 2039, all GAS tokens will have been generated and their production will stop.

GAS tokens have a variety of uses in the ecosystem.

For instance, developers on the NEO ecosystem use GAS to deploy and run smart contracts on the platform.

GAS also pays 'book keepers' for their activities in the ecosystem.

What Is The City of Zion?

This is an international but independent consortium of source developers, coders, and related specialists who work on the NEO core and ecosystem.

NEO has since migrated to the City of Zion consensus node, essentially decentralizing it.

NEO's Future In Decentralized Exchanges

It's worth noting that decentralized exchanges have evolved greatly to overcome some of the key challenges of early exchanges, including slow adoption, scalability and volatility.

The Atomic Swaps concept allows exchanges to swap cryptocurrencies from different blockchains without third-party intermediaries.

NEO's blockchain runs smart contracts that enable exchanges to do atomic swaps, which allows them to deal with many blockchains at the same time.

With time, as the technology comes of age, more exchanges are likely to adopt atomic swaps and this presents NEO with a golden opportunity to play a significant role in transforming decentralized exchanges.

Neo's Indivisible Units

NEO's two cryptocoins, NEO and GAS are technically different and serve different purposes.

NEO tokens represent share ownership while GAS is the dividend earned by shares.

It follows that, just like traditional shares, NEO is indivisible and its smallest unit is one NEO.

On the other hand, GAS can be divided into fractions. Similar to how mutual funds can be.

NEO's Architecture

Distribution

Of the 50 million sold during the crowd sales, the remaining tokens were locked into a smart contract, to be released gradually by developers.

Every year, NEO developers release 15 million tokens which they use to fund development goals.

NEO tokens generate GAS tokens, and these have a total supply of 100 million.

Gas tokens are deflationary and are controlled using a decaying half life algorithm, meaning that the last GAS tokens will be generated after 22 years.

Unlike most other cryptocurrencies, NEO can't be mined.

Consensus

NEO boasts of succeeding where most other cryptocurrencies failed; scalability.

Using the delegated Byzantine Fault Tolerance consensus, NEO supports over 10,000 transactions per second, making it one of the most scalable blockchains in the industry.

The key advantage of their consensus model is that the project can't be forked as it requires two-thirds majority votes to work.

The NeoVM Compiler

At the heart of the NEO smart contracts is the NeoVM Compiler. The compiler supports a number of programming languages including Microsoft.net, Go, Java and Python.

To safeguard the security of smart contracts, the compiler isolates smart contract codes inside the NeoVM.

One of the standout features of the NeoVM is that it deploys the "Docker" concept, effectively reducing requirements on system resources as it doesn't replicate the virtual environment.

Who Are The Founders?

The project was launched in 2014 by Da Hongfei through On Chain, his software development company based in China.

What Is Ontology's Role?

Ontology brands itself as a "high performance public blockchain". It provides public blockchains that have smart contracts and completely distributed ledger systems.

Since May 2018, Ontology has partnered with NEO to create NeoVM and NeoContract.

The two blockchains came together to create a smart contract ecosystem.

What Drives The Price Of NEO?

NEO's price rose astronomically from June 2017 to January 2018, moving from $1.07 to $190 in January 2018.

Although the price has since corrected itself, the unprecedented price surge raised its profile in the eyes of investors and crypto enthusiasts.

So, what drives it's price?

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Supply and demand. The total supply of NEO is capped at 100 million and the current circulating supply is 65 million. As the cryptocurrency platform gains more traction, the value of tokens is likely to go up.

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Market size. With over 1.4 billion people, China is the most densely populated country. In the likely event that NEO becomes the platform of choice in China, The price of NEO tokens will definitely reflect that.

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GAS. Investors holding the NEO token in their wallet earn the GAS token, a passive income distribution. This feature could drive more investors into buying NEO, which will in turn raise its demand and value.

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Availability. It's important to note that NEO tokens are available in a range of digital exchanges, making it's distribution paired as a credible choice for anyone interested in investing in cryptocurrencies.

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ICO success. At the start of 2018, NEO expected to host 29 ICOs in the next 12 months. If more ICO projects choose to ride on NEO, its demand, and price could go up.

What Is The Price Outlook Of NEO?

According to Walletinvestor.com, NEO's price looks set to go up astronomically in five years time.

The price forecast website tips NEO's price to reach $41 by the end of 2018, up from the current $26.

They foresee NEO's price hitting a conservative price $128 in five years. But other analyst are even more bullish predicting that NEO's price could surpass the $1000 mark in a few years time.

Overall, most analysts see a bright future in NEO.

Reasons To Invest In NEO

Predictably, most investors will look at what drives the price of NEO to gauge whether it's a good fit for them.

Here's why you should invest in Neo.

A) Passive Income

There's no denying that Neo is attractive to investors as it gives them a solid source of passive income in form of GAS.

B) Limited Supply

​With a total supply of 100 million tokens, the value of NEO tokens could rise significantly if the project is widely adopted.

C) Regulator Relations

The creator of NEO designed it to work with Chinese regulations, not against them. This could make NEO thrive in China at a time when other cryptocurrencies face widespread crackdown.

For investors, they get a perfect hedging option against Bitcoin, which has been a victim of Chinese crackdown on cryptocurrencies.

Reasons Not To Invest In NEO

A)Risk of failure

With its biggest market in China, NEO could be negatively affected by drastic regulations or crackdowns in China and this could be its biggest single point of failure.

B) Small Development Community

It's important to note that NEO has been advocated as Ethereum's competitor.

Given the large developer community that Ethereum enjoys, NEO has a long way to go to compete well.

Essentially, a small community of developers translates to development lag.

How To Buy NEO?

As NEO is one of the rapidly rising cryptocurrencies, buying it is easy and straight forward because of the many exchanges and dealers out there that sell it.

There are various ways in which you can buy NEO. These include, using fiat currencies or bank transfers to buy NEO at "on-ramping" exchanges, trading NEO for other cryptocoins at a digital exchange, or using cash to buy Neo from peer-to-peer dealers.

Where To Buy NEO?

Neo is sold in 114 pairs from several exchanges and can also be bought from peer-to-peer dealers.

The other method of acquiring NEO in a digital exchange is to swap it with other altcoins.

If you wish to buy NEO cryptocurrency from a peer-to-peer seller, you'll need to identify one, which can be a tough task considering that there's no peer-to-peer escrow platform for NEO.

Should You Purchase NEO?

After weighing the pros and cons of NEO, its safe to say that investing in NEO seems like a prudent idea. At least in the case of other cryptocurrencies. We've been keen on NEO for a very long time and it's lead to a lot of our success in the space. We wrote about it earlier and if you'd like to see how we've made our fortunes in crypto, click here for this case study.